Sales Tax Compliance for Food & Beverage Businesses

Complex sales tax laws and changing tax rates, the vagaries of exemption certificates, taxability of food and beverage items and configuration of POS systems provide headaches and bring risk to food and beverage businesses.

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Where are the challenges and risks?

Sales tax rates can vary depending on the location of each business, the type of food or beverage being sold, and other factors. This can make it difficult for businesses to accurately calculate the correct sales tax rate to charge customers.

Certain types of food and beverages may be exempt from sales tax in some states, while subject to tax in others; state sales tax exemptions on groceries are a great example. This can make it difficult for businesses to determine whether they need to charge sales tax on certain items.

The taxability of alcoholic beverages can also vary depending on the state. In many states, beer, wine, and spirits are subject to excise taxes, in addition to sales tax. In some states, like Colorado, beer is subject to a lower tax rate than other alcoholic beverages. In others, like Utah, certain types of alcoholic beverages are subject to higher taxes.

Navigating rules for prepared food: The taxability of prepared food can also vary depending on the state and how it is sold. For example, in some states, prepared food that is intended to be consumed on the premises is subject to a higher tax rate than food that is intended to be taken to go. How this is tracked in the POS system adds another layer of challenge (and risk). 

Sales tax audits can be particularly challenging for businesses in the food and beverage industry. Auditors may scrutinize the business's sales records, including receipts and invoices, and can levy penalties for any errors or omissions found. This can be a costly and time-consuming process for businesses to navigate.

How We Work

For years, businesses like yours have relied on purchased software or outsourced providers to help you navigate the world of sales tax compliance. Still, there’s been little breathing room, right? Tax automation software still has to be stable and compliance-ready in all 50 states and outsourced providers have relegated you to a 1-800 number, inconsistent team members and little or no response to questions, concerns or even to audit notices.

You are why Synexus exists. We were founded to address the sales and use tax needs of the food and beverage industry when we kept hearing from others like you. We’ve honed our approach to make sure we give you service, expertise and peace of mind so you can run your business without worrying about sales and use tax.

On a daily basis, you’ll enjoy:

Real-time, visual updates that show sales tax collection across all units and alerts on areas that fall outside acceptable ranges

A versatile, adaptable approach

Customization: you pay for the data you need

Secure communication of confidential data

An opportunity for employees to shift more of their focus from core tax functions to strategic, long-term goals

We are all-50-state experts on sales and use tax laws. Our team lives and breathes understanding what’s happening in different jurisdictions, making sure our proprietary technology is as up-to-speed as we are (if not more) and that we’ve got your business securely covered in compliance. You can talk to us, using direct dial – not 1-800 – numbers and enjoy building relationships with your Synexus team members.

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Tell us more  about your business and how your sales and use tax compliance is going.

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